Best for: borrowers looking for a smaller loan or applying with a co-borrower
Joint applicant (co-borrower) option
Lower minimum loan amount
Late and returned payment fees
Higher credit and income requirements
In-depth Review of Prosper Personal Loans
Prosper is “the other” peer to peer lender (even though it began operating slightly before Lending Club!). Like its larger, publicly traded peer, it serves as a marketplace to match retail and institutional investors with those seeking loans — though this fact is largely irrelevant to potential borrowers; their interactions, from application to their last payment, will be with Prosper. The limitations of external funding — namely, charging an origination fee and a constraint on loan terms — apply to Prosper just as other peer to peer lenders. Benefits Prosper offers include a relatively low minimum loan amount of $2,000 (varies by state) and the ability to apply with a joint applicant (co-borrower).
Are peer to peer loans like Prosper legit?
In a word, yes. Although Prosper itself is not a bank, it partners with WebBank, an FDIC-insured state chartered industrial bank in Utah. As a lender, Prosper and its partner WebBank are subject to the same kind of rules and regulations as a bank offering its own personal loans directly (like Marcus by Goldman Sachs). If you’re evaluating a loan company and are concerned about its legitimacy, beyond checking its customer reviews, look for its lending licenses and disclosures, and verify the license is valid and in good standing with the federal or state agency that issued it.
Prosper Personal Loan Details
|Loan amount range||$2,000 - $40,000|
|Loan lengths||36 or 60 months|
|Interest rate type||Fixed interest rate|
|APR range||7.95% - 35.99%|
|Fees||Origination fee: 2.41%-5%
Late fee: If more than 15 days late, whichever is greater of 5% of late payment or $15
Failed payment fee: $15
Prepayment fee: None
|Can check rate with no impact to score?||Yes|
|Loan uses||Pretty much any reason: refinance credit cards; consolidate debt; major purchase; home improvement; vacation; moving/relocation; medical expenses; etc.|
|Time to fund||Like fellow peer to peer lender Lending Club, Prosper relies on 3rd party investors to fund loan notes. Once your application has been approved, and any required verification (like identity or income) has been completed, Prosper will list your note for funding. Most notes are funded quickly, with Prosper noting that most borrowers receive their funds within 3-5 business days of their approval and verification being completed.|
|Joint application (co-borrower) option||Yes|
|Minimum qualifications||Minimum credit score: 640, but average is over 700
Minimum income: None, but average is nearly $90,000
|Can send loan proceeds directly to creditors (for debt consolidation loans)||No|
Representative Loan Example
Borrow $10,00 for 36 months
Receive $9,500 (less the origination fee)
15.34% fixed APR
Pay back $330.90 per month for 36 months
Total repaid $11,912.40
Cost of financing $2,412.40
What People Are Saying
CFPB complaint data: 240 complaints in last 24 months
Trustpilot rating: Poor (2.1/5) from 64 reviews
Better Business Bureau: Accredited, A+ Rating
A note on reviews
When looking at reviews or complaints, we urge you to think about them in context and take them with a grain of salt. For instance, companies that have more customers are likely to generate more complaints to the CFPB — so the raw number of complaints on its own doesn’t paint the full picture.
Similarly, it’s possible for companies to attempt to game ratings on services like TrustPilot, by timing when they ask borrowers for a review to encourage positive comments and by challenging negative reviews on the platform.
Most of all, borrowers should be cautious in how they interpret a firm being Better Business Bureau (BBB) “Accredited” or having an A+ rating. BBB “Accreditation” means merely that a business makes a commitment to make a good faith effort to resolve customer complaints and follow the BBB’s Code of Business Practices. It’s not clear how closely adherence to these practices is followed or how non-compliance is enforced.
Also note customer reviews are not included in the BBB rating, and it’s possible to have an “A+” rating despite having a poor customer rating.